October 24, 2011

From driving Daimler's innovation to Tesla's new sedan: do you know Jerome Guillen?

Jerome Guillen comes and greets me in Mountain View's Tesla headquarter. He is the Director of the Model S Program. We first met at Green:Net where Jerome talked on a panel about electrical vehicles and innovation, along with a Coda representative competing to release the first all-electric sedan on the market. He won the stage although Coda scheduled the release of its sedan ahead of Tesla in late 2011.

Mr. Guillen combines a French diplomatic charm and a German industrial rigor, in addition to a deep knowledge of the US market. Class. All that the Model S wants to be after the controversial success of the Roadster. While Tesla prepares to make the first Model S customers deliveries mid next year, the company purchased the last parts to sell the last units of its high-end model.

With 2,500 units the Roadster is comparable to a Mercedes SLS sports car. With 20,000 units a year, Model S is more in line with a mainstream car like an Audi A8. Tesla cannot afford to miss the transition to higher volume manufacturing. Facing new competition (Coda, Fisker, etc.) in a market that it pioneered, Tesla's leadership recruited last year new management stars -- including Jerome Guillen -- from established automakers to drive critical parts of the company.

A year later, the bet paid off with a release on schedule. The model S beta release gathered thousands at Tesla's new factory in Fremont two weeks ago. And more than 6,000 Sedans have been ordered for delivery next year, more than the production planned for 2012. "The car is sold out for 2012, 'ausverkauft' as they say in Germany" Jerome tells me with a smile. If I were to buy a Model S today, I would need to wait for early 2013 unless I went with the limited signature series that will be first manufactured.

At his desk, Jerome explains me that the Model S has never been off schedule, listing all the steps to release a reliable but totally new electrical vehicle to the mainstream market. Yet, the perception in the press was different in March when The Green Frog covered the race between Tesla's Model S and BMW's i8. Reporters questioned whether the Model S would be ready on time, prompting Tesla's CEO Elon Musk to bet. Analysts were anxious about the Government loans maturing in 2013, and Tesla's management team had suffered a terrible loss in February 2010 when a plane crashed taking the lives of three employees.

Today, nobody would question the DOE loan to Tesla after Solyndra's debacle last month. Jerome points out to me that Telsa has been frugal with its spending. "If you drive to our new plant in Fremont, you pass the Solyndra building. It does not take a genius to see the difference!". Telsa purchased the plant from Toyota and GM for only $42M, and retrofitted it with new equipment for the production of Model S. In contrast, Solyndra spent widely on a brand new factory.

The factory in Fremont is part of the plan to scale to 20,000 vehicle in full-scale production by the end of 2012. At $57,000 listed price for the Model S, the goal is clear: Tesla wants to become a billion dollar company. And Tesla is more solidly anchored in the automotive market today. A number of partnerships with Toyota and Daimler have helped. Early sales and positive customer feedback have confirmed it. "We want to build the most awesome car, which happens to be all electric" explains Jerome Guillen.

"What was the biggest challenge to navigate the transition from Roadster to Model S?" I ask Jerome. "Developing a new platform and a brand new car is a lot of hard work". And a brand new car it is: Telsa designed the car from the ground up (picture above). The batteries are spread evenly at the base, and the chassis has several innovations. The absence of a combustion engine gives more space, allowing Tesla's CEO to make a grand entrance when the car was unveiled last month. The car seats five people comfortably with ample trunk space for luggage and the option to sit two more in the back.

The big difference with Daimler where Jerome led innovation is access to resources. "We have very talented people but not an army of it, and we are working on a tight budget". Focus is the key and the energy is palpable on the second floor where Jerome and I talk. That is where most of the staff works at the Mountain View headquarter. The manufacturing area, still used for production of the Roadster and R&D for the Model S and the future Model X, is on the first floor. There are no walls as in most Silicon Valley companies. The fast pace environment is clearly a competitive advantage for Tesla according to Mr. Guillen.

Coming from Daimler that owns the oldest car brand still in existence (Mercedes), Jerome Guillen did not have to adapt to the fast pace environment in Silicon Valley: he was already "working in a semi start-up mode". He helped launch several companies with innovative business models. The move of the French executive from Daimler to Tesla was amicable and well noted in the press. One change though coming from the German company: Jerome dropped the suit.

Jerome gets excited, just talking about one of his former babies: Car2go, a car sharing service company. He logs into his computer and shows me the cities where Car2go shares thousands of vehicles including smart electric cars: Ulm, Amsterdam, Lyon, Vancouver, Austin, etc. Jerome gives a lot of credit to the people he worked with in the past. His only regret: not winning the Paris tender when he was at Daimler. Bollore group won and their blue car is starting to hit the streets of the French capital.

"What about Tesla?" I ask. Jerome Guillen answers clearly that Tesla has no plan to move in the service business. "The cars we make are so awesome that people will not want to share them!" Jerome likes to innovate and does not take comparisons with the Detroit or Stuttgart based automakers. Tesla is building a new kind of car company. He points to his smart phone where he can check the status of his Model S car.

"Tesla has a mix of seasoned automative people and of Silicon Valley talent who have been very successful with local companies" underlines Jerome who clearly appreciates the opportunity to be at the heart of Silicon Valley. It is no surprice that Telsa is also innovating on the IT side. The car has a 17-inch screen, providing a new car experience competing with Ford Touch and GM's OnStar. With an Internet connection and a home-grown operating system, Tesla will be able to offer many apps, inside and outside the car.

Tesla is also discussing whether to open an API to developers in the future. I ask this new generation of "connected car" opens security issues, Jerome quickly points that Tesla has many talented executives and that Paypal that Elon Musk co-founded was never taken down... Time is running out. Jerome Guillen looks at his watch. Our hour is up. One of his managers leading a critical task is waiting for his daily review. The Model S will continue to be on schedule with the multi-cultural and sharp executive at his wheel.

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The Green FrogThe Green Frog is a blog passionate about making a positive impact on the environment and the economy. Join its global community and read the latest leaps in cleantech innovation, social entrepreneurship, and venture capital.